In 2021 Google ramped up its shopping features to provide enhanced shopping experience for customers as well as support the digital marketing efforts of retailers. The introduction of new features by Google kickstarted fierce competition with Amazon which dominated the ecommerce world. Now that 2 years have passed since the launching of new shopping features, it is pertinent to look at how Google Shopping with features has fared against Amazon. Moreover, what impact it has created so far on the overall e-commerce ecosystem? In this blog, we will address all these questions and more.
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Before we move ahead to discuss how successful has been the changes brought to Google Shopping, it is important to highlight some of the features that Google introduced since 2021.
Google’s Ramped-up Shopping Features:
Back in 2021 when the world was just recovering from a global pandemic, ecommerce businesses witnessed a sudden and steep rise in online ecommerce retailing. The global e-commerce jumped to $26.7 trillion in 2020(United Nations). The Covid-19 also brought seismic changes in consumer behavior and their preferences.
Sensing the historical opportunity to seize upon the opportunities and realizing that its earlier products were not faring well, Google decided to ramp up its Google Shopping to claim space in e-commerce retailing and challenge the predominance of Amazon. Hence, it launched many new features to create a more immersive and engaging shopping experience to rival its biggest competitor: Amazon.
Here are some of these features that Google has launched since 2021 on various occasions.
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Google Lens for Shopping:
This feature allows users to search for products either through phone cameras or screenshots/images. This feature was added to Google App initially, later it was made part of Chrome on desktop.
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Google Shopping Graph:
This is a real-time and dynamic dataset of products, merchants, inventory, price, reviews, availability, etc. Google Shopping Graph relies upon Artificial Intelligence (AI) and Machine Learning (ML) and it assists other Google products such as Google Assistant, Google Lens, and more.
In this way, this shopping feature enables customers to experience a more up-to-date and comprehensive shopping experience. Now Google’s Shopping Graph AI-enhanced model can understand over 35 billion listed products.
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Free Product Listing:
In an attempt to further undermine the dominance of Amazon in e-commerce, Google announced allowing retailers to list their products free on the Google Shopping tab. This substantial move is allowing small retailers to list and showcase their products to a wider audience without having to pay an advertisement fee.
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Google Merchant Center Integration:
Google also announced integration with other platforms such as GoDaddy, WooCommerce, and more.
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Google Shopify Partnership:
Though Google announced integration with Shopify before launching features in 2021, this partnership proved a big breakthrough. This partnership allows Shopify merchants to integrate products directly from stores to Google Merchant Center.
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Business Identifiers:
This feature allows retailers/brands to add their attributes on their product listing, for instance, “women-owned” etc. These business identifiers help businesses make their business stand out based on Search, Map, and Shopping Tab.
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Immersive Shopping Through Augmented Reality (AR):
To provide a more immersive and engaging shopping experience, Google launched an Augmented Reality-based product discovery feature. This is just pushing the boundaries of product listings and promotions to make the online shopping experience more real than ever before.
AR shopping capabilities, for instance in clothing, allow users to visualize how clothes will look like by “try it on” Augmented Reality world. Customers can see clothes on a range of skin tones and body types. Moreover, they can refine a product to find what exactly they want.
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Shop in 3D:
More than 50% of users find 3D images of products more engaging and that leads to better conversion rates. Earlier this year, Google launched new tools to show 3D visuals of the products. Google has added this feature for shows that allow shoppers to see 3D models of footwear before purchasing it.
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Personalized Shopping Experience:
Google has also announced Personalized Shopping Results based on the shopping history and previous shopping habits. The customers also offer the option to set their preferences and turn off or turn on customized controls to get better results.
Customers also have the option to select their preferred brands or stores to ensure their shopping experience is reflective of their habits and preferences.
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Trending Products
This feature allows you to see products that are trendy within a specific category. So, whenever you search for a product against a keyword, the Trending Product feature allows you to see related products trending at that time.
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Read Reviews from Other Shoppers:
Page Insight is another major feature added to Google Shopping. This gives information to users who are on a webpage or searching for a product like reviews from other shoppers, pros and cons of a product, etc. There is also a button that helps you track the price of a particular product and notify you whenever there is a price drop.
These are some features that Google has launched in different phases. But the question is whether these updates have succeeded in achieving their intended target. We will discuss here how successful these features have been in increasing the share of Google Shopping in the e-commerce market.
Did the New Features of Google Shopping Work?
As has earlier been discussed, Google has rolled out multiple rounds of features/updates to further enhance the shopping experience. It did help bring many benefits for Google as well as for shoppers.
Here are some benefits that help Google Shoppers to emerge as a competitive e-commerce platform.
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Improved Product Discovery:
Product recommendations, personalized shopping lists, and Google Lenses do help shoppers find products of their choosing more conveniently and effectively.
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Increased in the Number of Merchants:
Google’s decision to offer product listing free and help them reach a wider audience has caused in the crease of number of merchants. In just one year, the number of merchants using Google Shopping increased by 80%. The most obvious beneficiaries of this free advertisement were small businesses and other merchants.
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Wide Variety of Merchant Tools
Through Google Merchant Center, Google introduced multiple merchant tools in addition to integration with Shopify. These tools make it easier for sellers/retailers to understand how to sell their products on Google Shopping. For instance, Google Shopping Strategies helps retailers to attract new customers. Google Management is also a helpful tool for listing and monitoring sales performance.
All these merchant tools have led to a significant increase in merchants who are now using this platform for online business.
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Wide-Ranging Choices and Information:
The ramped-up features of Google Shopping enable users to compare prices, reviews, availability of products, shipping options, and ratings across various platforms. These wide-ranging options have been a major cause of the increasing use of Google Shopping platform by online customers.
Here are some facts and figures that show the comparison between Google Shopping and Amazon to better understand how successful they have been in their features in terms of revenue, and other factors.
Figures Don’t Tell a Lie!
Now let’s see how much Google Shopping is earning in comparison with Amazon so that we can say with confidence whether the features introduced have worked or not.
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Google Shopping Vs Amazon (Total Revenue)
Though it is hard to find exact revenue figures for Google Shopping as Google has multiple sources of revenue generation, we can still find figures showing the percentage of Google’s total revenue that comes directly from advertisements on Google Shopping.
For instance, the percentage of advertising revenue from Google Shopping was 36.4%, 37.2%, and 38% in 2021, 2022, and 2023 respectively. The total revenue of Alphabet Inc. including Google Shopping as well for the trailing twelve months (TTM) ending June 30, 2023, was $74.4 billion.
And how much did Amazon earn during this same period? A whopping $538.04 billion (Amazon’s Financial Report). This means Google Shopping is lagging far behind Amazon.
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Google Shopping vs. Amazon (Total Monthly Searches)
When it comes to monthly searches, there is also a huge difference between Amazon and Google Shopping.
In July 2023, Amazon had estimated 2.6 billion total visits, whereas, Google Shopping has 1.2 billion monthly searches on average. In other words, Amazon.com has 46% more searches in comparison with Google Shopping.
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Google Shopping vs. Amazon (Total Conversion Rate)
Conversion rate is an important indicator of the performance and growth of any e-commerce platform. Here again, Google Shopping faces a tough challenge from Amazon.com.
The average rate of conversion of Amazon is between 10% to 15%. In other words, out of every 100 visitors that come to Amazon, 10 to 15 visitors end up purchasing a product.
Whereas, the conversion rate of Google Shopping across all industries is 1.9% which is very low in comparison with Amazon.
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Google Shopping vs. Amazon (Cost Per Click):
In terms of Cost Per Click, Google Shopping has a slight advantage over Amazon. As per different sources, Google Shopping has an average $0.66 cost per click, whereas Amazon’s CPC ranges from $0.30 to $3 or higher depending upon industry, competition, product, and other factors.
Final Thoughts:
We live in an age of digitalization. From our daily lives to businesses, everything is becoming digitalized. It is therefore a welcome move by Google Shopping to come up with some innovative shopping features to bring a sense of competition in the e-commerce world. The features include 3D shopping, Google Lens, Augmented Reality-based shopping, Google Shopping Graph, free product listing, and more.
Though these features have helped make Google Shopping a competitor of Amazon, it fell short of expectations. Amazon is far ahead of Google Shopping when it comes to total revenue, monthly visitors, conversion rates, and the like parameters. Multiple factors are responsible for this low performance such as customer loyalty, reliable and speedy delivery experience, ecosystem integration, trust and brand recognition, and the like.
Therefore, we can conclude that at least for now, the features introduced in Google Shopping have not worked well the way they should have. However, competition must remain fierce in the e-commerce market because it is beneficial for consumers and merchants. After all, they have multiple ecommerce platforms for shopping and retailing.